Biedronka and Dino entered into an illegal agreement regarding employees? There is an UOKiK investigation

Luc Williams

Companies didn’t compete with each other for employees?

“We suspect that entrepreneurs who provided services to the Biedronka and Dino chains could conclude an agreement under which they did not compete with each other for employees. We are also checking whether such arrangements could be coordinated by retail chains. The effect of the analysed practices would be the lack of flexibility in changing jobs by drivers and a reduction in the rate of increase in their wages,” said the president of the Office of Competition and Consumer Protection, Tomasz Chróstny, quoted in the press release.

President of the Office of Competition and Consumer Protection (UOKiK) after receiving a signal and conducting analyses, it initiated explanatory proceedings. It is checking the practices of the Biedronka and Dino retail chains and transport companies serving these entrepreneurs. In February and April this year, with the court’s consent and with the assistance of police officers, UOKiK employees searched the headquarters of Jeronimo Martins Polska, Dino Polska and transport companies. The collected materials are being analysed – UOKiK reported.

“As a result of the potential agreement, transport companies could not employ drivers working for other participants in the suspected collusion. In turn, discount store owners could impose and enforce compliance by carriers with the established rules. This could involve an entrepreneur whose employee left work without consulting him, submitting a +block+ of such a person to the network. In such a case, the driver would not be able to take up employment with another carrier servicing a given distribution centre,” Chróstny pointed out.

As the President of the Office of Competition and Consumer Protection pointed out, the agreements on non-competition for employees, so-called no-poaching agreements, affect the most sensitive element of price competition between employers, i.e. the amount of wages offered to employees. They can lead to employees’ wages being lower or not increasing as much as they would have if such collusion had not occurred.

UOKiK explanatory proceedings

“The explanatory proceedings are conducted in the case, not against specific entrepreneurs. If the collected evidence confirms the suspicions, then the President of the Office of Competition and Consumer Protection will initiate antitrust proceedings and bring charges against specific entities. Participation in an agreement restricting competition is punishable by a financial penalty of up to 10 percent of the entrepreneur’s turnover. Managers responsible for entering into the collusion are threatened with a financial penalty of up to PLN 2 million,” Chróstny noted.

The Office of Competition and Consumer Protection reminded that the Competition Law prohibits agreements that have the purpose or effect of restricting it. The most well-known examples of prohibited activities include price fixing, tender fixing or market division. Entrepreneurs themselves are not always aware that competition law also applies to markets other than those where they sell their products. Meanwhile, agreements restricting competition may also concern the labour market and arrangements concerning employees.

“Collusions that restrict competition on the labor market have a negative impact on both the situation of employees and the dynamics of economic development. That is why we have prepared a special guide in which we explain when such actions may be prohibited and may result in a high financial penalty. This is required reading, first and foremost, for every employee, HR departments, as well as large and small entrepreneurs and trade unions,” emphasized the president of the Office of Competition and Consumer Protection. (PAP)


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